Digital Financial Infrastructure

In India, cyber insurance covers (generally) the following - Identity theft - Cyber-bullying and cyber-stalking - Cyber extortion - Malware intrusion - Financial loss due to unauthorized and fraudulent use of bank account, credit card, and mobile wallet - Legal expenses arising out of any covered risk - Social Media Cover - Phishing Cover - E-mail Spoofing - Media Liability Claims Cover - Cyber Extortion Cover - Privacy Breach and Data Breach by Third Party. Cyber insurance generally focuses on damages caused by cyber threats or electronic incidents, not physical damage to devices. Hence, statement 2 is incorrect. Hence only options 1, 3, and 4 are correct.

Statement 1 is Correct (Data storage in India): This is the core requirement of the directive. It mandates that the entire payment system data be stored in systems located only in India. This aims to improve data security and regulatory oversight. Statement 2 is Incorrect (Public sector ownership): The directive doesn't specify ownership requirements for the data storage systems. Private companies can also store data as long as the systems are located within India. Statement 3 is Incorrect (Audit report submission): The directive des not have reporting requirements for system audits to the Comptroller and Auditor General of India (CAG) which typically audits government entities.

The National Payments Corporation of India (NPCI) The NPCI operates the National Financial Switch (NFS), which is the largest network connecting ATMs across various banks in India. This network facilitates inter-bank transactions and allows users to withdraw cash from ATMs even if they don't belong to the bank that owns the ATM.

The Merchant Discount Rate (MDR) is a fee levied on merchants by payment processors for accepting debit and credit card transactions. It's typically a percentage of the transaction value. So, when a customer uses a debit card at a store, the store pays a fee to the bank that processes the transaction. Hence, option C is the correct answer.

Statement 1 is correct: Bharat Interface for Money (BHIM) is a payment app that lets you make simple, easy, and quick transactions using Unified Payments Interface (UPI). You can make direct bank payments to anyone on UPI using their UPI ID or scanning their QR with the BHIM app. You can also request money through the app from a UPI ID. Statement 2 is not correct: From a consumer point of view, three levels of authentication are required in this app. 1. The device ID and mobile number,
2. The bank account which you are linking to this app, and
3. The UPI Pin which is needed to complete the transaction. There are three factors of authentication versus a normal net banking app or a chip-in debit card which will only have two factors of authentication.

Pair 1 is incorrect: The Belle II experiment is a particle physics experiment designed to study the properties of B mesons. It is not related to artificial intelligence. Pair 2 s correct: Blockchain technology is the underlying technology behind cryptocurrencies like Bitcoin. It is a distributed ledger technology that ensures secure and transparent transactions. Pair 3 is incorrect: CRISPR-Cas9 is a gene-editing technology used in the field of molecular biology to edit genes. It is not related to particle physics. Therefore, only pair 2 is correctly matched.

Statement 1 is Correct: The National Payments Corporation of India (NPCI) was established to facilitate retail payments and promote financial inclusion in India. They achieve this by
1. Developing and deploying innovative payment infrastructure like RuPay cards, UPI, etc.
2. Enabling participation of a wider range of players in the payments system, including non-bank entities.
3. Setting standards and guidelines to ensure secure and efficient electronic payments. Statement 2 is Correct: RuPay is a domestic debit and credit card payment network launched by NPCI in India. It provides an alternative to international card networks like Visa and Mastercard. This domestic network can potentially lower transaction costs for merchants and banks compared to international schemes. Therefore, both statement 1 and statement 2 are correct.
Hence, option C is the correct answer.

Statement (a) is correct: UPI enables direct bank-to-bank transfers through mobile apps, removing the need for intermediate mobile wallets. Statement (b) is incorrect: UPI promotes digital transactions, but it will not completely replace physical currency in the near future. Statement (c) is incorrect: UPI deals with domestic payment systems and has no direct impact on FDI inflows. Statement (d) is incorrect: Direct Benefit Transfer (DBT) uses Aadhaar-linked bank accounts, not UPI, as the main mechanism for subsidy distribution.

Statement 1 is Correct. Mobile telephone companies and supermarket chains owned and controlled by residents can be promoters of Payment Banks. This allows entities with a wide reach to expand financial services to unbanked populations. Statement 2 is Incorrect. Payment Banks cannot issue credit cards. They can only issue debit cards linked to a pre-existing bank account. Statement 3 is Correct. Payment Banks are not allowed to undertake lending activities. Their focus is on facilitating basic banking services like deposits, payments, and money transfers.

A core banking solution is a centralized system that integrates various banking functions across a bank's branches. It allows for:
- Networked branches: Customers can access their accounts and conduct transactions from any branch within the bank's network, regardless of where they originally opened their account.
- Improved efficiency: CBS automates many manual processes, leading to faster transactions and better customer service.
- Centralized data management: All customer information and account data are stored in a central location, facilitating easier access and record keeping. Therefore, the correct answer is 1 only.